Academic journal article American Journal of Law & Medicine

Financial Conflict of Interest: An Unresolved Ethical Frontier

Academic journal article American Journal of Law & Medicine

Financial Conflict of Interest: An Unresolved Ethical Frontier

Article excerpt

Financial conflict of interest has become one of the most contentious issues in medicine today. Several decades ago studies disclosed that physicians who had investments in medical facilities were referring patients for more tests and procedures than physicians who had no such investments. More recently, physicians who forego expensive tests and treatments for patients have been accused of skimping on care for personal financial gain. Physicians who emphatically tout certain treatments have been criticized for possessing hidden financial ties to the manufacturer of the products. Some physicians engaged in clinical trials have been suspected of enrolling patients who do not strictly conform to the research protocols so that they can collect fees from contract research organizations. And in the aftermath of deaths and complications in gene therapy experiments, some scientists and their institutions have been criticized for possessing a financial stake in companies that are involved in the studies.

In the past, such issues have been handled locally and quietly behind the closed doors of hospitals and medical schools. However, highly publicized examples of financial conflict of interest have stimulated the Federal Government to develop new guidelines to minimize or eliminate conflicts of interest, impose stringent rules to protect human subjects, strengthen government oversight of clinical research, and consider legislation that would levy large monetary penalties for violations.'

Have financial incentives gone too far? Has medical care been compromised because of incentives to do too much or too little for patients? Has money motivated for-profit insurance companies to deselect patients, to price gouge, to cherry pick? Is the loyalty of young physicians and students being captured inappropriately by meals and gifts from industry? Most scientists and physicians believe that they cannot be bought, especially by paltry gifts or trips to resorts for meetings. How can we be sure? How large is the hidden epidemic of financial conflict of interest, and what impact does it have on the practice of medicine and the cost of medical care?

This essay looks at the origins of the expanding relationship between academia and industry and the benefits and pitfalls of this collaboration. It assesses available information on the extent of such conflicts and considers the concern that financial conflicts of interest have become pervasive in academic medicine and have led to overt bias on the part of physicians and clinical investigators. This article then examines how the conflicts of interest in medicine fit into the broader aspects of changing societal norms, and finally makes recommendations that might limit the impact of such conflicts.


Is medicine just another commodity and should we be treating it as such? Some argue that health care, being a service, is just that: a suitable object of commerce that is enhanced by rigorous competition. However, the major components of health care, namely medical care, education, and research, have only recently been exposed to the full force of the free market. The economic force of this free market has achieved dramatic social and economic consequences.

Financial incentives are powerful inducements to all the major stakeholders in medicine, just as they are in other walks of life. In the past, a fee-for-service payment system motivated physicians to spend more money on medical care; now capitated systems motivate them to spend less. DRG-based reimbursement2 motivated hospitals to reduce their patients' length of stay. Ownership of laboratories or imaging facilities motivated physicians to refer more patients for testing. Payment for accepting patients in clinical trials motivated physicians to enhance enrollment. Financial reward is and continues to be a strong inducement for physician-entrepreneurs to generate new ideas and develop new equipment, technology, products and computer applications. …

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